Trump H-1B visa restrictions threaten Indian IT professionals

The traditional pathway that has carried hundreds of thousands of Indian software engineers to the United States is facing its most severe disruption yet, as the Trump administration prepares a suite of dramatic fee increases and structural restrictions on the H-1B visa programme.

While previous administrations have tinkered with the visa lottery, the incoming administration is planning several overlapping changes. These include a proposal to introduce multiple $100,000 fees, a wage-weighted lottery system that favours senior, higher-paid applicants over entry-level talent, and a $70,000 fee for international students utilising the STEM Optional Practical Training (OPT) programme to work in the US.

Though some of the more extreme ideas, like scrapping the H-1B programme entirely, would require an act of Congress to bypass the Immigration and Nationality Act, immigration experts warn of a "death by restriction" strategy. By making the visas prohibitively expensive and administratively difficult to secure, the administration is effectively squeezing foreign tech talent out of the American market.

Why Indian tech workers are the main target

Indian-born professionals are the primary users of the H-1B programme. According to data from US Citizenship and Immigration Services (USCIS) for the 2025 fiscal year, Indian nationals accounted for 283,772 of the 406,348 approved H-1B petitions—roughly 70 percent of the total.

The vast majority of these approvals are concentrated in technology. Computer-related roles accounted for 62 percent of all approved petitions, with systems analysis and programming representing over half of the total. The median annual compensation for these computer-specific roles stood at $140,000.

Under the proposed changes, senior, highly paid engineers at major US technology firms are likely to remain insulated, as the wage-weighted lottery prioritises higher salaries. However, early-career Indian professionals and the IT-services staffing model are being squeezed out. That model relies on hiring entry-level engineers at lower wage scales, which both the flat fee increases and the wage-weighting proposals heavily penalise.

The death of the outsourcing model

Indian technology firms have already started pulling back from the H-1B system. Registrations by major Indian IT providers—including TCS, Infosys, HCLTech, Wipro, LTM, and Tech Mahindra—plummeted by 92 percent for the fiscal year 2027 cycle, falling to just 1,763 from 21,919 the previous year.

The top seven Indian outsourcing firms secured fewer than 5,000 initial H-1B approvals in the most recent cycle, representing a 70 percent drop from fiscal year 2015.

This drop points to a structural shift in how Indian technology companies operate in America. The classic model of flying an Indian consultant to a client's site in the US is largely being replaced. Instead, companies are hiring local staff in the US for customer-facing project leadership, while shifting the core development and engineering work offshore to India.

Rigorous scrutiny on employers

US authorities are also intensifying their focus on the employment chain itself. Rajiv Dabhadkar, founder of the National Organization For Software and Technology Professionals, noted that the US government is actively scrutinising who sponsors the worker, who controls their day-to-day duties, and whether an American worker was displaced.

This focus on the "right to control" the worker is particularly disruptive to third-party staffing and intermediary agencies. Furthermore, investigations by the US Department of Labor have targeted foreign worker exploitation, including coercive arrangements and wage kickbacks, which authorities argue undercut American wages.

While alternative visa routes like the L-1 for intra-company transfers and the O-1 for extraordinary ability exist, they are highly selective and do not offer a scalable substitute for the H-1B. For Indian workers, the green-card backlog for the EB-2 and EB-3 categories remains so severe that all available fiscal year 2026 EB-2 visas for India were exhausted before the year even ended.

The unexpected benefit for India

The restriction on physical visas may ultimately boost India's domestic tech sector. Industry analysts expect US firms to shift remote-friendly tasks, such as software development, cloud engineering, and artificial intelligence projects, directly to India-based engineering hubs and Global Capability Centres (GCCs).

While US companies will still require a physical presence for project leaders, the bulk of high-value technical delivery is expected to remain in India, reshaping the business model rather than destroying it.